2015 AFDR Highlights: Measuring Cost per Lead and Cost per Sale

This newsletter is presenting an ongoing series of highlights from the 2015 Annual Franchise Development Report (AFDR). The 2015 AFDR is based on responses from 139 franchisors representing 36,313 units (32,693 franchised and 3,620 company-owned). This week: measuring recruitment costs.

Tracking cost per lead and cost per sale have both been an inexplicably weak point for franchisors for years now. Also inexplicable in this high-tech, big data era, in 2014 the percentage of franchisors who track these two critical development metrics fell in comparison with previous years.

• Cost per lead - In 2014, 4 in 10 (42 percent) franchisors reported that they still don't track this important expenditure; that compares with 3 in 10 (28 percent) in 2013, and 1 in 3 (35 percent) in 2012.
• Cost per sale - Unarguably the most important metric for a franchise development department. In 2014, more than half (52 percent) said they don't track this. That compares with 4 in 10 in 2013 and 2 out of 3 (65 percent) in 2012.
• Average cost per sale - In 2014 (excluding broker fees), this key number was $9,142. That's a lot of money to not be keeping track of.

How To Order

The complete 2015 AFDR, with analysis and benchmarks, is available for $199. New for 2015 is a 5-video package that includes videos of presentations from this year's Leadership & Development Conference. The package, at $299, also includes the 2014 AFDR for comparing year-to-year survey results. For ordering information, call Sharon Wilkinson at 800-289-4232 x202, email [email protected], or visit franchiseupdate.vizigy.com.